Government officials, business representatives and the media are preparing the German public for a massive energy crisis this winter. If gas imports from Russia were to dry up completely, German gas storage facilities would be empty by next February, according to a calculation by Brussels think tank Bruegel.
Many plans are already circulating to impose lower temperatures in private homes and public buildings and to shut down large parts of public infrastructure, including swimming pools, libraries and sports facilities. Even stopping air purifiers in schools that work to reduce the risk of coronavirus infection is under discussion.
Company representatives warn of the collapse of large operations in energy-intensive industries such as chemicals. Many small businesses, such as bakeries, fear for their existence. Employers’ chairman Rainer Dulger told the Suddeutsche Zeitung“We are facing the biggest crisis the country has ever seen… We are going to lose the prosperity we had for years.”
Under German and EU law, private households and critical infrastructure such as hospitals, retirement homes and care facilities receive priority protection. But this is already in question. Economy Minister Robert Habeck (Greens) proposed to reconsider their prioritization in the allocation of gas in favor of industry.
The relevant settlement was intended for short-term disruption, he said during a visit to Vienna. This made no sense in the case of gas supply disruptions lasting several months. Industry could not automatically be put in the back of the queue, and that would have to be “considered”, the minister said.
Siegfried Russwurm, chairman of the Federation of German Industries (BDI), said the current gas shortage prioritization rules were “only created for the short-term disruption of individual pipelines”. For the harsh new energy reality, he said, “politicians in Berlin and Brussels must create a new set of rules.”
But even if critical installations and private households retain their priority in energy allocation, many will no longer be able to afford the high gas and electricity prices. According to the Federal Statistical Office, the prices of energy products have already increased by 38% in June compared to the same month last year. Natural gas was up 60.7% and electricity now costs 22% more.
Last week, Klaus Müller, chairman of the Federal Network Agency – the market regulator for electricity, gas, telecommunications, post and railways – and a former Green Party politician, s spoke to the RND news agency and clarified the extent of the additional financial burden. : “For those who now receive their heating bill, the costs are already doubling – and that does not even take into account the consequences of the war in Ukraine.”
He went on to explain, “From 2023, gas customers will have to prepare for a tripling of their bills, at the very least.” It was “absolutely realistic”, he said, that customers currently paying €1,500 a year for gas would be asked to pay €4,500 and more in the future.
In addition to record high energy prices, the still high inflation rate is also a huge burden. According to the Federal Statistical Office, the average price level in June was 7.6% higher than a year ago. Food was 12.7% more expensive and fuel saw a 33.2% increase, despite the ‘fuel rebate’ in the form of tax cuts on mineral oils, most of which go into pockets oil companies.
The energy crisis is largely artisanal. This is the price that the population must pay for the war NATO is waging against Russia in Ukraine. The attempt to bring Russia to its knees by imposing economic sanctions and supplying Ukraine with billions in weapons triggered the energy crisis.
In a guest post for the Frankfurter Allgemeine Zeitung On Monday, Chancellor Olaf Scholz (Social Democrat) made it clear that the government was not prepared to back down under any pretext and to seek a negotiated solution. With the historic decisions of recent months, the European Union has taken a big step towards becoming “a geopolitical player”, he boasted.
The German government does not want to give up on its plans for world power, which are linked to the biggest rearmament campaign since Hitler. The road was “not easy, even for a country as strong and prosperous as ours,” Scholz wrote. “We will need perseverance.” Many citizens were already suffering from the effects of war and anxiously watching their next electricity, oil or gas bills, he acknowledged. But he was convinced that “we will come out of this crisis stronger and more independent than we entered it”.
Since the early 1970s, Germany has been buying gas reliably and cheaply first from the Soviet Union and then from Russia. Even just before Russia’s reactionary attack on Ukraine, which NATO deliberately provoked by its steady advances eastward, Germany was buying more than 50% of its gas from Russia.
Since then, because of the sanctions and the war, the gas supply only covers 30% of the demand. The completed Nord Stream 2 pipeline has not been commissioned. The Yamal pipeline, which crosses Belarus and Poland, has ceased operations. Nord Stream 1 ultimately only delivered 40% of its potential capacity as a repaired gas turbine in Canada fell victim to sanctions.
Additionally, Nord Stream 1 is currently undergoing annual maintenance, which is expected to be completed by Thursday. However, it is not known whether Russian gas will again be transported to Germany. It would be impossible to compensate for a complete breakdown.
The European Commission has calculated that if supplies were completely cut off this month, just under 15% of the gas Russia has supplied to Europe so far this year could be matched by other suppliers. He said the EU would miss its target of filling gas storage facilities 80% by early November, with a maximum of 65-71% possible.
In the first half of this year, the EU imported more natural gas than in the first half of 2021, although imports from Russia fell by 30 billion cubic meters. But the alternative import options are now largely exhausted. Norway and the Netherlands, which supply gas by pipeline to Germany, have reached their maximum capacity.
Global liquefied natural gas (LNG) supply is also unlikely to increase at this time. Demand from China, the world’s largest LNG importer, is expected to increase significantly in the coming months. In addition, there is a fire at Freeport, the second largest export terminal in the United States, which will not return to full operation until the end of the year.
Germany does not have its own LNG terminals. The two floating terminals currently under construction could unload a maximum of one billion cubic meters of natural gas per month, or about 10% of the consumption for a winter month.
LNG is also extremely expensive. On exchanges, the price has increased sevenfold in some cases. This is causing difficulties for intermediaries such as Germany’s largest gas trader, Uniper, which had entered into long-term supply contracts at fixed prices. The German government is backing these companies with billions of euros and in May rewrote the energy security law to allow them to pass on higher prices to end customers.
Government officials mock the victims of their policies with cynical advice. Klaus Müller, the Green Party leader of the Federal Network Agency, urged people to take technical action in the face of massive price increases: “Talk to your landlord or a tradesman, if he is still available. What can be done to optimize heating?
He also suggested, “Voluntarily increase your budget or put money aside each month, for example in a special account.” Who is he trying to fool with this?
According to a parliamentary question tabled by Die Linke in September 2021, 12% of full-time employees contributing to health and social insurance receive a gross monthly salary of less than €2,000. And what about the unemployed, pensioners and students? It is simply impossible for them to re-equip their homes or build up reserves. They can barely afford the bare necessities with the money they have each month.
To compensate for the massive price increases, there is currently a one-time allowance of €300 on the energy price, which is paid in September and will be taxed, a drop in the ocean. Unemployment recipients receive even less. Retirees who do not pay income tax will leave empty-handed.
While a special fund of 100 billion euros is quickly made available to the Bundeswehr (armed forces), the government coalition is letting the workers fall on the edge of the precipice. There is already talk of warming centers and rent moratoriums, as it is clear that many people will no longer be able to afford rising energy costs.
Freezing and starving is the price that the government imposes on the population to become again the first military power of Europe.